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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Step aside, challenger banks. Google and a band of eight traditional FIs are coming for you.
News broke this morning that six financial institutions have joined Citi and Stanford Federal Credit Union in offering checking and savings accounts through Google Pay. The new banks include BankMobile, BBVA USA, BMO Harris, The Coastal Community Bank, First Independence Bank, and SEFCU.
These new accounts will leverage Google Pay’s existing infrastructure, which will serve as the front end of a fully digital banking experience.
BBVA announced today that its accounts will launch in 2021 as co-branded, FDIC-insured accounts. The bank will provide the account, while Google will provide the front-end, user experience, and financial insights. The collaboration will be facilitated by the BBVA Open Platform, the bank’s open banking initiative.
“BBVA has focused for decades on how it could use digital to advance the financial industry and, in so doing, create more and better opportunities for customers to manage their financial health,” BBVA USA President and CEO Javier Rodríguez Soler said. “Collaborations with companies like Google represent the future of banking. Consumers end up the true winners when finance and big tech work together for their benefit.”
Aside from the list of bank partners, there are not many details available about the new, hybrid accounts. Tech rumor site 9 to 5 Google speculates, however, that Google with leverage the partnerships to issue its own branded debit card.
Remember when the mobile payments game was first getting started? The industry was rallying around NFC as the technology of choice for mobile payments. Bluetooth low energy (BLE) was a close second, and QR codes were generally the last choice.
That was in 2012 and now it appears that 2020 is throwing us yet another curve ball– QR Codes are back in style in the U.S. That’s because PayPal has partnered with InComm to launch its PayPal and Venmo QR codes technology at pharmacy chain CVS.
This move will implement low-touch mobile payments at CVS’ 8,200 brick-and-mortar stores across the U.S., offering shoppers a secure payment experience without needing to touch a keypad or sign a receipt.
PayPal users can pay using stored debit or credit cards, bank accounts, their PayPal balance, or PayPal Credit. Venmo users can also pay using their stored debit or credit cards and bank account, but will additionally be able to tap into their Venmo balance or Venmo Rewards.
“In the midst of COVID-19, we have seen an incredible acceleration of digital payments and touch-free payments,” said PayPal EVP and CPO Mark Britto. “Companies of all types and sizes are looking for ways to maintain the safety of their customers and employees, especially through touch-free experiences like curbside pickup and enhanced online shopping. QR codes complement these and provide retailers an additional payment method that furthers this touch-free mission and continues the growth of digital payments for all partners in the ecosystem. The essential nature of pharmacies makes CVS Pharmacy the perfect initial partner for PayPal and Venmo QR Codes – and we’re proud to help their customers stay safe while purchasing what they need.”
This week’s deal also marks a multi-year agreement between PayPal and InComm. The partnership enables InComm to distribute PayPal QR Code technology to its network of retailers, allowing them to integrate the QR code payment technology into their POS terminals.
PayPal has been touting its touch-free payment technology amidst the COVID-19 pandemic (see below). And given the payment giant’s previous traction and existing user base, the company will certainly come out on top as a winner in the post-pandemic economy.
Elsewhere across the globe, QR code payments have already seen success. Ant Group’s Alipay uses QR codes for in-store payments and had over a 50% adoption rate at the end of 2018.
A partnership between Nutmeg and TrueLayer will bring the benefits of open banking to the U.K. wealth management business for the first time. The online investment platform announced that it will leverage TrueLayer’s financial APIs to enable its customers to make faster, more secure payments to their accounts online or from their mobile device.
“The payments industry is still dominated by card payments, but bank transfers are the best and fastest way to get money into a Nutmeg account and therefore into the market,” Nutmeg Chief Operating Officer Matt Gatrell said. Unfortunately, he explained, the lack of a quality user experience has made customer reluctant to use this option. “With this in mind,” Gatrell said, “Nutmeg has worked with TrueLayer to launch Open Banking payments for customers – reducing a lengthy user process to just a couple of taps.”
Courtesy of the new partnership, all users will need to do is login to their bank, and confirm the payment to their Nutmeg account to make additions to their investments. Nutmeg said this will enable investors to get their money into the market quicker, and boasts that it is the first wealth manager in the U.K. to offer this account funding option, which TrueLayer CEO and co-founder Francesco Simoneschi called “the killer use case for Open Banking.”
Simoneschi explained: “Simplifying and speeding up processes such as payments makes a tangible difference to consumers. It helps them to have much more control and choice with their finances. This is a fundamental goal of Open Banking and another step forward in its wider adoption.”
Nutmeg has bigger plans for leveraging Open Banking than just bank transfers. In a blog post at the company’s website, Nutmeg Product Manager Charlie Masters noted that open banking has helped incentivize the company’s integrations with companies like Yolt, Emma, and MoneyDashboard earlier this year. “We see these new financial products as a great opportunity to improve the customer experience,” Masters wrote.
Founded in 2011 and headquartered in London, U.K., Nutmeg has been a Finovate alum for more than eight years. With more than $153 million in funding raised, the company includes Goldman Sachs, Armada Investment AG, Convoy Global Holdings, Taipei Fubon Bank, and Pentech Ventures among its investors.
Intelligent virtual assistance company Interactions launched a new product this week that aims to help accounts receivable management companies in their collections efforts.
The new product, Virtual Collection Agent (VCA), helps organizations with their collection efforts by– as the name suggests– providing a virtual agent to interact with the customer. The virtual agent creates efficiency for organizations by replacing human agents, creating scale, and automating negotiation.
Not only this, VCA is also beneficial to consumers. One in four consumers prefer interacting with a virtual agent when it comes to discussing uncomfortable financial information.
Piloting the new launch is ERC, a business process outsourcing service provider. “Over the past few years—and particularly in this pandemic—we recognized that automation was no longer a ‘nice to have’ in our industry, it was a requirement for addressing demand,” said ERC CEO Marty Sarim. “The response we’ve seen from both our customers and live agents has been encouraging, and the efficiencies we’ve been able to build into our business has put us in an extremely competitive position.”
Interactions’ other products include an intelligent virtual agent for customer engagement and a social listening and engagement tool that taps AI to to find and prioritize meaningful social posts, suggest responses, and gather insights.
Founded in 2004, Interactions facilitates one billion customer interactions per year across six different channels for large brands including Hyatt, Humana, LifeLock, and Mountain America Credit Union.
Small business cash flow solution provider Kabbageunveiled its Kabbage Checking offering today. The new business checking account is designed to give smaller businesses the “capabilities, convenience, and security” of traditional business accounts, while sparing them “monthly fees or friction.”
The accounts charge no opening or maintenance fees, and do not require minimum or daily balances. At present, Kabbage Checking offers 1.10% APY, which is paid out monthly. The company states this is among the highest interest rates available for a business checking account.
Kabbage Checking accounts come with a Kabbage Debit Mastercard, support electronic billpay, and provide access to free ATM access via a 19,000-ATM national network. Account holders also can create up to five e-wallets to help manage spending and savings. The new accounts can be used with other Kabbage solutions such as Kabbage Insights for daily cash flow analyses and forecasts, Kabbage Payments to accelerate settlements and avoid cash flow shortfalls, and Kabbage Funding, which helps account holders avoid accidental overdrafts. Additional features, including wire transfers and mobile remote deposit, are expected to be added later in the year. The accounts are issued by Green Dot Bank, and are insured up to $250,000.
“We believe in the businesses too often left out, overlooked and underestimated,” Kabbage President Kathryn Petralia said. “Kabbage Checking is a new banking service built to give those small businesses an upper hand to earn more, save more, and grow their business faster without sacrificing anything they expect from a bank.”
Kabbage has been one of the more active fintechs in terms of helping small businesses during the current COVID-19 pandemic. The company approved +209,000 small businesses for $5.8 billion as part of the Paycheck Protection Program, making Kabbage the third largest PPP lender in the U.S. by application volume. This feat, according to Kabbage CEO Rob Frohwein, was a large step for the company, and perhaps an even greater one for fintech writ large.
“The PPP validated the criticality of FinTech,” he said in a statement earlier this month. “Most of the small businesses we reached would have been ignored had this crisis taken place just 10 years ago. These businesses can only be served in mass by an automated platform that places need in front of privilege and levels the playing field that has too long been unequal in our financial system.” He added that fintechs increasingly will be the solution provider of choice, as more small businesses migrate toward these newer companies instead traditional banks “when seeking even the most basic financial services.”
P2P lender and challenger bank Zopa recently formed a partnership with Paylink Solutions to tap into the company’s cloud-based digital income and expenditure product, Embark.
Paylink’s Embark will help Zopa quickly find the most suitable loan product for clients by understanding their affordability. The tool taps into credit report data and leverages open banking technology to offer lenders a 12-month view of customer bank statements. Embark also provides identity verification and document upload technology.
“Teaming up with Paylink Solutions to deploy the Embark tool at this time has enabled us to provide an even better experience for our customers,” said Zopa Chief Customer Officer Clare Gambardella.
The partnership is part of Zopa’s initiative to increase its digital efforts. Embark will enable Zopa’s potential borrowers to use the self-service portal or use an online form with the help of a live customer service agent.
With Embark, Zopa customers also have access to free debt advice. Customers can self-refer to PayPlan, a U.K.-based debt help tool that provides personalized debt management plans.
“From day one, we have seen Zopa’s customers referring themselves to PayPlan; this is in an age where customers want to self-serve more,” said PayPlan’s Head of Partnerships, Andrew Alder. “It’s becoming more important for organizations, solution providers, and debt advice providers to work closely to create innovative ways for customers to still be able to access advice in a frictionless way.”
There may still be a few weeks of summer left, but high-growth vertical payments innovator Flywire is already in back-to-school mode. The company announced today that it has enhanced its digital payment platform to make it easier for educational institutions and student recruitment agents to manage student data and track payments.
“Education agents play a very important role in the relationship between schools and their international students,” Flywire EVP of Education Sharon Butler explained. “Their ability to represent educational institutions locally can make a big difference in how a school is viewed by prospective students.” Butler added that the new enhancements will “streamline the international student recruitment process” and improve the way that agents are able to engage with students and institutions.
A worldwide payment provider for students and educational institutions, Flywire helps schools offer their students a secure and convenient payment process that accelerates the flow of funds, makes reconciliation simpler, and keeps operating costs low. The enhancements to Flywire’s platform will make recruitment agents’ jobs easier by centralizing student data and providing transparency over the payments process. Educational institutions will benefit from this payment transparency and tracking, as well, and are able to use the technology to build custom payment plans to give students more flexibility.
Flywire also announced today that it has forged a strategic partnership with China’s international education industry association, BOSSA. A non-profit, government-supported organization, the Beijing Overseas Study Service Association will get expanded access to Flywire’s cross-border services for Chinese students studying abroad. The partnership leverages Flywire’s extensive experience working with education recruitment agents in China; BOSSA has 300 such member agents who are responsible for recruiting and advising more than 60% of all Chinese students studying overseas each year.
“Flywire offers state-of-the-art technology and services for cross-border payments,” BOSSA spokesperson Jon Santangelo said. “We are pleased to endorse them to Chinese education agencies, and China’s wider international education sector as a whole. The level of integrity they’ve achieved in the higher education field is a big differentiator to Chinese agencies.”
Founded in 2009 as peerTransfer, Flywire has raised more than $263 million in funding from investors including Goldman Sachs, Temasek Holdings, and Bain Capital Ventures. Mike Massaro is CEO.
Michigan-based Bankjoy announced a pair of new credit union partners late last week. The company, which enables credit unions and community banks to offer their members and customers a variety of mobile banking and online banking solutions, will work with both CACL Federal Credit Union of Pottsville, Pennsylvania, and SIU Credit Union of Carbondale, Illinois, to help them add new members and enhance the experience for current customers.
“As digital demands continued to rise – as well as fraud – within the credit union industry because of COVID-19, we are pleased to provide our technology offerings to meet these growing demands at SIU and CACL,” Bankjoy CEO Michael Duncan said. “Having these progressive tools to make online processes more efficient and user friendly enhances the value of credit unions not only right now but for the foreseeable future, as well.”
CACL FCU, with 11,600 members and $146 million in assets, will leverage its new relationship with Bankjoy to boost its membership base by offering more mobile options. “We were blown away by the layout and advancements within the platform compared to the competition,” CACL FCU COO Joshua Burgess said in a statement. Burgess also praised Bankjoy’s voice banking solution Joy, which he called a “huge selling point.”
Bankjoy’s online and mobile solutions are equally likely to make a big impact with the even-larger SIU CU – which boasts 40,800 members and $344 million in assets.
These deals reflect a resumption of Bankjoy’s aggressive, partner-making pace from earlier this year. In April alone, the company announced that it was working with seven different credit unions representing 87,000+ members and more than $1 billion in assets combined. Also this spring, Bankjoy hosted a COVID-19 Online Summit to help address the impact of the global health crisis on the credit union industry.
“Our COVID-19 Online Summit was a very transparent event for credit union executives to freely exchange ideas and help each other,” Duncan told CU Times. “We’re all looking for more information to stay in front of this crisis and when you can get it from a peer that’s always a good thing.”
The global health crisis has been hard on credit union members, as well. The impact of COVID-19 on those who rely on credit unions for their banking was the focus of a Gallup study earlier this year. The survey revealed that credit union members were feeling more disruption in their financial lives due to the pandemic compared to the national average (76% versus 70%). The data also showed a significant increase in the number of credit union members who characterized their financial wellbeing as “struggling” or “suffering”.
Many of the recommendations – helping increase peace of mind, building hope, and reducing unnecessary stress – mirror those suggested by other financial institutions looking for ways to help their customers during the fight against the coronavirus.
Advanced biometric technologies like facial recognition have their critics. The city of Boston, Massachusetts, just a few weeks ago, became the second community in the world to ban the use of facial recognition technology over concerns of bias against ethnic minorities. And the use of facial recognition in places like China has heightened concerns over the potential privacy-violating aspects of the technology.
Nevertheless, the fact that companies continue to innovate in the biometric authentication space suggests that these issues are more likely to be seen as contemporary challenges rather than permanent obstacles. This is all the more so in a world that is coming more – rather than less – connected, and digital.
Trulioo, a leading global identity verification provider, is one the companies that is helping small businesses take advantage of these technologies. The company announced today that its low-code developer tool, EmbedID, will now feature both facial recognition and document verification functionality. This will enable SMEs to verify new users during the account opening process more efficiently and accurately, and assure that KYC and AML requirements are met.
“Taking a multi-layered approach to identity verification offers businesses the strongest defense against increasingly sophisticated bad actors,” Director of Growth at Trulioo Rutherford Wilson explained. “Adding document verification gives another layer of protection to help reduce risk, especially when combined with reliable identity verification.” Wilson credited the combination of these features for providing businesses with the “increased confidence in knowing the user is tied to a real identity and that they are who they claim to be online.”
Small businesses can use the technology by copying a snippet of code and pasting it on their website. This will automatically generate a stylized registration form that is prewired to Trulioo’s GlobalGateway to provide instant verification of personal identification information. Via the connection to GlobalGateway, small businesses can verify the authenticity of government-issued ID documents and leverage facial recognition technology – equipped with liveness detection – to establish that the individual opening the account is the same person in the photo on the ID document.
“In an age of ongoing digital transformation, it’s essential for SMBs to be able to access the same identity verification solutions used by large organizations to protect their business and scale their company,” Wilson added. He cited cost as the main barrier for most small businesses when it comes to accessing “bank-grade” technology and security. This leaves them more vulnerable to fraudsters than their larger rivals, and makes it more difficult for them to compete.
“We designed EmbedID to help level the playing field to allow for accelerated innovation, customer acquisition, and competition in the marketplace,” Wilson said.
Founded in 2011 and headquartered in Vancouver, British Columbia, Canada, Trulioo has been a Finovate alum since 2014 and most recently demonstrated its technology at our European conference in February. Named to CNBC’s 2020 Disruptor 50 roster in June, Trulioo was featured in our look at Canadian fintech innovators on Canada Day earlier this month.
Financial market data distribution and management solutions provider Xignite has launched a new set of market data management services to change the way businesses manage their data in the cloud. Xignite Enterprise Microservices is a suite of solutions that make it easier and more efficient for companies to store, distribute, manage, and control market data.
The microservices approach – embraced by Xignite in this latest offering – provides core functionality via a combination of “loosely coupled, independently deployable components.” Not only can these components work together or separately, but also they can be massively scaled at a very low cost. This compares favorably to legacy systems, which often consist of monolithic platforms that are more expensive, difficult to scale and manage, and typically not used at full capacity.
Xignite Enterprise Microservices runs on Xignite’s cloud-based architecture, which supports 250+ different data sources and 12 billion API calls daily for more than 750 clients in fintech and financial services. The vendor-agnostic solution has already been deployed by fellow Finovate alum NICE Actimize.
“We are incredibly excited to launch Xignite Enterprise Microservices, which we believe will truly revolutionize market data management,” Xignite founder and CEO Stephane Dubois said. “The culmination of over 10 years of nonstop innovation, we have taken the cloud-native architecture that has powered some of the world’s most prominent fintechs and scaled it to meet the unique requirements of institutional players that consume huge amounts of data but often have no way of integrating and optimizing it in an efficient and cost-effective way.”
The suite consists of seven cloud-native microservices tailored for both buy and sell-side firms, fintechs, and exchanges. These include:
Data Lake
Optimization
Entitlements and Usage
Reference
Historical
Real-Time
Fundamentals
Headquartered in San Mateo, California, Xignite introduced its data-as-a-service market data solution in 2006, and has been a Finovate alum since 2014. Recently, the company announced that it had enhanced its financial data cloud APIs to streamline delivery of news headlines and company earnings during the global public health crisis. This announcement followed news from the company that it was seeing “record demand” for its financial data during the pandemic.
“The past two-and-a-half months have been difficult both within our industry and in the wider world,” Dubois said. “It is reassuring to know that we’ve been a reliable source for our clients in these trying times. There is enough to worry about right now and nobody wants their market data providers to be a part of that.”
A pair of Finovate alums have joined forces to help a leading financial platform in Asia launch a lending solution as part of its planned expansion in the region.
German cloud banking platform provider Mambu and alternative credit score provider CredoLab have announced a partnership with GoBear, a financial services platform based in Singapore. The company, founded in 2015 as a metasearch engine and now operating as a financial services platform that has served more than 55 million consumers, plans to expand into the Philippines later this year. Technology from Mambu will power the core system in GoBear’s lending architecture, with CredoLab’s credit scoring helping ensure the company is able to bring financing to those communities that need it most – and often struggle to secure it.
“Having access to responsible credit should be a financial right for all,” GoBear Chief Lending Officer Mike Singh said. “Tapping into fintech solutions like Mambu’s and CredoLab’s brings us one step closer to making this a reality for the region’s 296 million unbanked or underbanked.”
The tripartite partnership was the result of a pair of relationships; Mambu and CredoLab have been long-time partners, while CredoLab and GoBear collaborated as recently as November 2018, when the two companies worked together on a credit solution for the underbanked.
“In less than five years of operation, GoBear has built a stellar reputation as a leading financial services platform and we envisage great things for the company as it continues to build its lending business,” Mambu Managing Director for APAC Myles Bertrand said. He pointed out that the company’s technology would enable GoBear to readily add new products while maintaining a high level of customer service.
CredoLab CEO Peter Barcak pointed to his company’s SDK, API, and alternative credit score – which leverages metadata from smartphone usage – as powerful tools for companies like GoBear that are trying to serve a broader array of customers. “Our ability to generate a credit score for customers who cannot prove their creditworthiness in the conventional financial system makes us uniquely positioned to support GoBear as they diversify their business and move into lending in a controlled way.”
Finovate alums since 2013 and 2018 respectively, both Mambu and CredoLab made their Finovate debuts at FinovateAsia events. Mambu demonstrated its technology the year we held our Asian conference in Singapore. CredoLab unveiled its CredoScore the year we held FinovateAsia in Hong Kong.
Speaking of FinovateAsia, remember that our new, all-digital FinovateAsia conference begins next week. Check out our FinovateAsia hub for more details!
Predictive analytics innovator Stratyfy is one of ten companies selected to participate in the incoming cohort of FIS’ 2020 Fintech Accelerator program.
“The ten companies selected for the fifth year of FIS’ Accelerator program bring a wealth of promising ideas and technologies,” FIS Chief Growth Officer Asif Ramji said. “We look forward to working with these firms to bring their ideas to life.”
Joining Stratyfy in the program are:
Cirrus Secure
Cobbler Technologies
Dasceq
Mall IQ
Sequretek
Silot
Surfly
TrustStamp
XpenseOne
Seven of the companies in the cohort have headquarters in the United States. Of the others, Sequretek is based in Mumbai, India; Silot in Singapore; and Surfly in Amsterdam, The Netherlands. And after four years in operation, the accelerator, in partnership with The Venture Center, will conduct its fifth program virtually due to the challenges of the global public health crisis.
In addition to being entirely virtual, this year’s program will run for 18 weeks instead of the usual 12 weeks to allow for increased mentoring and training time. The program will culminate with a Demo Day technology presentation on October 14th. Participating startups will also receive a monetary investment; the amount was not disclosed.
Executive Director for The Venture Center, Wayne Miller, pointed to the program’s success in empowering startup companies and helping improve access to financial services and technology. “With our partners at FIS and the State of Arkansas, we’re honored to be a part of bringing cutting-edge technologies to the places and people who need them, particularly in this moment of monumental technological advancement,” Miller said.
The news comes in the wake of Strayfy’s announcement of a new strategic partnership with Innovesta Technologies. The two companies are collaborating on a machine learning solution that will help businesses better measure the risk of and opportunity in non-public companies. The partnership combines Stratyfy’s decision engine and advanced machine learning technology with Innovesta’s comprehensive data assets to deliver real-time insights into the forces that impact business performance.
“Models built from historical data offer little help during an unprecedented health and economic crisis like the current global pandemic,” Stratyfy co-founder and CEO Laura Kornhauser said when the partnership was announced in May. “Achieving an inclusive global financial recovery requires robust risk management strategies, and those strategies necessitate an understanding of the unique challenges being faced by every business. Stratyfy’s decision management solutions will leverage Innovesta’s trustworthy data to directly address this need.”
Founded in 2016, Stratyfy is headquartered in New York City. The company was named one of the world’s 100 most promising startups to watch last year by CNBC.
